Monday 23rd of December 2024

sing a song of sixpence .....

sing a song of sixpence .....

The decision by Qantas to ground its fleet will inflict lasting damage on its brand and see the airline lose customers, says a marketing expert

The move by Qantas CEO, Alan Joyce, to ground the Qantas fleet around the world, will cause significant damage to the brand, regardless of his motives for doing so.

Branding is all about perception, rather than some objective reality. And the key to branding is trust. This move has the potential to further erode trust in the "flying kangaroo" among its key audiences, including business travellers and the government.

To some degree, you could argue that the Australian public were conscious of the ongoing negotiations with pilots, engineers and baggage handlers  and were willing to shift the blame for delays and cancellations to the broad concept of the "unions". This worked in Qantas' favour; by announcing delays were due to "industrial action", it was able to handball any responsibility for the problems on to some other ambiguous and unidentified bunch of "workers".

But what Mr Joyce did over that crucial 72 hour period, with his acceptance of a substantial pay rise, and then a day later, shutting down the airline , is to "trash" any support for Qantas management in its negotiations.

Most people will perceive that when industrial action is being taken by the "unions", Qantas was placed in a difficult situation, one that is partly out of its control. The Qantas public relations strategy of placing the blame squarely at the feet of the different negotiation unions, could have been seen to be mostly working. Passengers were angry, but mostly not with Qantas.

With this latest move, however, there's no doubt in the minds of the public that Qantas initiated the lock-out at a time when large numbers of passengers were trying to get around Australia and the world.

The fact that the announcement was a surprise to everyone but the Qantas board, which had clearly planned the move,  will do Mr Joyce and the Qantas brand no favours at all.

Despite what many commentators have said, this action is very different to the Australian Waterfront Dispute of 1998 between the unions and the Patrick Corporation , simply because Qantas' actions directly involve consumers who experienced delays .

People's perception of the  waterfront  dispute may well be that it was an aggressive  confrontation but in the short term at least they were unaffected by it.

This time, however, it is different. The Qantas lock-out and shut-down, is direct and concrete for anyone who has ever flown on a plane - all the more so for those unfortunate travellers stuck at airports. And the footage does not look good for Qantas.

By surprising the government, and embarrassing them while hosting a major international event in CHOGM, Qantas will also have lost the support of another of their key stakeholders - the government.

So, Qantas management and its board has made a big strategic mistake.

Regardless of the fact that Fair Work Australia has terminated the industrial action, the Qantas brand will have been seriously trashed by the action of the board and its CEO.

The business outcome is that Virgin will begin to take market share from Qantas, particularly with business travellers, who simply want a reliable service. Through this action, Qantas has forced many of its loyal customers to "trial" Virgin. This is explained by the Ehrenberg Awareness-Trial-Reinforcement consumer behaviour model, where a key component of any business strategy is to move consumers towards your brand by getting them to trial it. If consumers trial the brand, and are satisfied, then it increases the likelihood of their use of it in the future. By trying the brand, you make it easier to make a decision about whether you want to use it again in the future.

Marketing is not about massive changes in behaviour, it is about small, incremental shifts. If Virgin is able to provide a level of service equal to Qantas, then it will be difficult for Qantas to get back all of those customers, at least in the short-term.

Desperate times call for desperate measures, and obviously Qantas saw its lock-out and grounding as one that it needed to do. But Mr Joyce and the board have made an internal management decision, based on internal organisational needs, rather than a marketing decision. Many will argue that it had to do this, but losing sight of where your brand equity comes from is also a managerial imperative.

To think that its passengers will understand the complexities of negotiations with unions, take its side, and return to it when it is all over, is naïve in the extreme.

Yes some will return, but Qantas' market share, certainly in the medium-term, will be seriously damaged. Even if 10 per cent of Qantas' current passengers think twice before booking, there will be a flow-on effect on the Qantas bottom line. When it is all over it will take more than a bit of positive PR and a few full-page ads to get its customers to forgive it.

One outcome of this approach, is that Mr Joyce may well get what he wants - a reduced Australian workforce willing to accept lower wages, and the capacity to put much of the international component of the business in Asia.

But the ramifications of his approach is that he may also end up with a reduced customer base, which doesn't help anyone... except maybe Qantas' competitors.

qantas shutdown|grounded fleet|qantas brand damage

 

repainting the red kangaroo

In order to restore confidence in Qantas, the directors of the board have no choice but to sack Alan Joyce, count their losses and star afresh with someone who has better people skills, especially with the workforce. Qantas needs a new shop window rather than Alan Joyce pontificating about his Hilterian ways. Spit and polish on Alan Joyce will do nothing to the brand.  Same leaky rust bucket with a coat of paint.

Alan Joyce has to go.

hallelujah to that …..

If bus or train drivers pull on a snap strike, stranding thousands of people trying to get home from work, there is much outrage. Politicians fume. Radio shock jocks and newspaper editorials thunder about trade union thuggery.

Yet when Qantas grounds its entire fleet without a hint of warning, abandoning hundreds of thousands of its passengers here and around the world, it's somehow very different. Just a clever industrial negotiating tactic, really.

The clear message that emerged from the shambles of the past week is that Qantas doesn't actually give a damn about its passengers. Or customers, as they are now tweely referred to in marketspeak. Alan Joyce blathered fulsome apologies, but they would have been cold comfort to people who missed weddings, business appointments, a visit to the bedside of a dying relative, or a connection on the holiday trip of a lifetime. Betcha a lot of those people will be flying another airline next time.

Qantas has always traded on its image as the national flag carrier, the flying kangaroo, a grand old Australian institution like, say, the ABC or Sir Donald Bradman. And once it was. But no more. High time to recognise that it's just another business gorilla intent on "increasing shareholder value", as the saying goes. If that means exporting Australian jobs to Asia, paying Thai cabin crew $400 a month, then so be it.

For all the low Tory ranting about union militancy, it's actually corporate bullying and rent-seeking that's rampant these days. In coming weeks we'll get truckloads of it again as the smaller mining companies whinge about the government's mineral resource rent tax and their inalienable right to shove a coal seam gas project in your back garden. Naturally, the Abbott opposition will support them.

I applaud the approach of that stalwart independent MP Tony Windsor, who has been pestered up hill and down dale by the likes of the West Australian mining billionaire Andrew "Twiggy" Forrest.

"I'm sick and tired of the mining companies saying one thing and doing another,'' he told me on Thursday.

"I won't speak to them. As far as I'm concerned, they can all get stuffed."

Hallelujah to that.

Mike Carlton

employer militancy .....

Qantas has emerged as the chief villain after the dispute that momentarily paralysed the nation, with a new poll showing more voters disapproving of its actions than those of any other key player.

The latest Herald/Nielsen poll finds 60 per cent of voters disapproved of the decision by Qantas two weeks ago to ground its entire domestic and international fleet as a tactic to force an end to a long-running dispute with three unions.

Only 36 per cent of those surveyed agreed with the measure that left thousands stranded at home and abroad.

The Prime Minister, Julia Gillard, who moved to terminate the dispute by referring it immediately to Fair Work Australia for resolution, was not rewarded in the court of public opinion. The poll found only 40 per cent approved of her handling of the dispute while 46 per cent disapproved.

Labor and Greens voters were far more supportive of Ms Gillard's actions than were Coalition voters. Vice versa, Coalition voters were more supportive of the action by Qantas than were Labor and Greens voters.

The unions also found themselves on the wrong side of public opinion with 49 per cent disapproving of the industrial action they took in their dispute with Qantas. Only 41 per cent approved of union action.

The poll of 1400 voters was taken from Thursday night to Saturday night, a fortnight after Qantas grounded its fleet. Since then, Qantas has embarked on a public relations offensive, offering every inconvenienced passenger a full flight plus reimbursement for costs incurred for being grounded.

The period also encompassed a row in which the Coalition said Ms Gillard should have used a separate section of the act which would have terminated the dispute immediately, stopped Qantas grounding its fleet and bypassed Fair Work Australia.

The dispute has also ignited an industrial relations policy battle in Canberra with the Coalition and big business siding with Qantas, saying it had no other choice.

Business and some in the Coalition claim that the unions were able to bring Qantas to its knees because Labor's Fair Work laws, which replaced Work Choices, enable unions to bargain on a greater range of issues, including job security.

The Opposition Leader, Tony Abbott, disagreed, saying the Qantas dispute was not a matter of policy but the Prime Minister not using all the tools at her disposal to end it while keeping the planes in the air.

The Assistant Treasurer, Bill Shorten, said yesterday the Fair Work Act should not be amended to remove job security provisions from the bargaining process.

''The dispute] was a failure of leadership within Qantas for the years leading up to the grounding of the airline to be able to convince its workforce about workplace change,'' Mr Shorten told Sky News. ''Too much of the political debate about industrial relations in Australia comes down to a debate about what is the right regulation. We get the microscope out to look at the legislation, but when do we start talking about good leadership in Australia?''

The Fair Work Act will be reviewed next year.

The ACTU secretary, Jeff Lawrence, concurred with Mr Shorten, saying the Qantas grounding was an example of ''employer militancy''.

Public Points Its Finger At Qantas & PM In Poll

roadkill .....

Conservative commentators on the Qantas grounding are playing loose with the truth.

In grounding the entire domestic and international Qantas fleet last month, the firm's chief executive, Alan Joyce, claimed the action was the only way to stop the unions' industrial campaign. The implication was that grounding the planes was the only way to have Fair Work Australia (FWA) intervene and order a stop to all industrial action.

In the weeks since, a number of anti-union ''cold war'' industrial relations warriors, including Peter Reith, Chris Corrigan, economist Judith Sloan and coalition politicians, have thrown themselves into the debate, questioning the efficacy of the Labor government's Fair Work Act. The common theme is that the grounding of the Qantas fleet demonstrated the weakness of the act, because the company had no other way to get FWA to order a cessation of all industrial action other than by grounding its entire fleet. This is patently untrue.

To understand the massive hoax being played on the Australian community by both Qantas management and numerous conservative commentators, it is necessary to distinguish between Joyce's notice of an intention to lock out his employees from 8pm on Monday, October 31, and his grounding of the entire Qantas fleet two days prior to that date. Of these two steps, only the first was ''protected'' industrial action. There was no need for the grounding of the Qantas fleet to have FWA order a stop to all industrial action. Simply announcing in advance that a lockout was to occur would have been sufficient to invite FWA to issue orders stopping all industrial action.

Under section 424(1) of the Fair Work Act, "FWA must make an order suspending or terminating protected industrial action that ... is threatened, impending or probable" where it is likely ''to cause significant damage to the Australian economy or an important part of it". In other words, the industrial action did not need to occur, but rather it only had to be "threatened, impending or probable".

Let's be clear here. Qantas only had to announce its intention to initiate a planned lockout of its employees to invite FWA to suspend or terminate all industrial action. Once convinced of the impending damage to the economy, FWA had no discretion under the act other than to suspend or terminate protected industrial action. So the claim that Qantas had no option but to lock out its employees in order to get all industrial action stopped is nonsense. But there is more subterfuge by Qantas management here.

Having announced on Saturday afternoon that a lockout was to be enforced as of Monday at 8pm, why did Qantas ground its entire fleet on the Saturday, before FWA could possibly hold a hearing and stop all industrial action? Why indeed?

The explanation offered by Joyce was that "individual reactions to this lockout decision may be unpredictable ... for this reason, as a precautionary measure, we have decided to ground the Qantas international and domestic fleet immediately". Qantas grounded its fleet because it apparently had no faith in the professionalism of its own pilots and ground staff.

If Qantas management genuinely thought that the worry, stress and distractions to their pilots caused by the impending lockout could jeopardise passenger safety, then presumably management's current plans for outsourcing and staff cuts would equally pose a safety risk.

Following the logic of Qantas' ''risk assessment'', it should ground all its flights until the company's planned restructuring is fully completed.

In the hearing before FWA, there was no indication from members of the full bench that they agreed with Joyce's odd rationale. In any case, FWA was concerned with preventing the airline's planned lockout of its staff. Ultimately, the Fair Work Act worked smoothly, with FWA holding a full bench hearing and then ordering a stop to Qantas' planned lockout. In the end, there was no lockout and not a single worker lost a day's pay.

So, what does this episode tell us about Qantas and the current state of industrial relations in Australia? It exposes a senior management team willing to trash its own company's brand, cause irreparable harm to the Australian economy as well as inconvenience its customers for stated reasons that defy logic.

It is worth noting that FWA found that the unions' industrial campaign had not caused significant economic harm, as Qantas pilots had not taken any strike action, instead restricting their campaign to making in-flight announcements airing their grievances to passengers. The only factor causing significant economic damage was management's grounding of the fleet.

There was nothing about the events of that weekend that call into question the efficacy of the Fair Work Act. Ultimately, the government intervened when it received notification of the Qantas decision and a full-bench hearing of FWA took place, leading to the termination of all industrial action, well in advance of the planned commencement of the lockout. By any measure, the Fair Work Act came out smelling of roses. Qantas, on the other hand, has a rather different odour about it.

Bruce Hearn Mackinnon is a senior lecturer in human resource management at Deakin University.

http://www.smh.com.au/opinion/politics/facts-fly-under-the-radar-20111116-1nj57.html

tweet tweet .....

A hijacked hashtag is the latest PR disaster to hit Qantas.

At midday, the Qantas PR team operating the @QantasAirways twitter account, sent out a call for luxury flying experiences.

This came after months of negative publicity stemming from industrial disputes with three unions, that resulted in the grounding of the entire Qantas fleet on October 29.

The idea, it seems, was to reward a winning tweet with a Qantas first class gift pack.

The prize for tweeting good things about the embattled airline was a pair of Qantas pyjamas, and a "luxury amenity kit".

"To enter tell us 'What is your dream luxury inflight experience? (Be creative!) Answer must include #QantasLuxury."

Within an hour, the hashtag was trending across the country, but the tweets were not quite what management expected.

@GrogsGamut tweeted: "#QantasLuxury- when the passengers arrive before the couriers delivering the lockout notices do".

@aptronym said: "Getting from A to B without the plane being grounded or an engine catching fire. #qantasluxury".

And @the-aaron-smith said: "#qantasluxury is chartering a Greyhound bus and arriving at your destination days before your grounded Qantas flight".

Social media expert James Griffin from SR7 said that by about 1pm, Australians were sending out 51 tweets a minute on the hashtag. The majority of these were tweets making fun of the idea of #qantasluxury.

"Firstly, timing went completely out the window with this campaign," Mr Griffin said, referring to Qantas management walking away from negotiations with the Transport Workers Union and Australian and International Pilots Association yesterday.

"First and foremost, there should have been further consideration by the social media team about the sensitivities of the day," he said.

"This is a prime example of how consumers and the community can take control of a campaign or a brand through social media - evidenced by the speed and ferocity of tweets.

"Consideration should have been given to what Qantas and consumers have been through in the past couple of months."

Qantas has not responded to requests for comment.

http://www.smh.com.au/travel/travel-news/qantas-makes-hash-of-tweet-campaign-20111122-1nsa4.html

no bill .....

The NSW Police have, without explanation, dropped their investigation into alleged death threats made against Qantas's chief executive Alan Joyce and other senior managers.

Complaints from Qantas about threatening letters and emails led to police forming a taskforce during the escalating industrial dispute with unions representing long-haul pilots, aircraft engineers and ground crew including baggage handlers.

But NSW Police have confirmed that Strike Force Barrine - made up of officers from Botany Bay Local Area Command - has decided not to continue the investigation.

A police spokesman would not elaborate on the reasons that the investigation had ended.

"As far as the investigation is concerned, it was alive and now it's not," he said.

The Australian Federal Police have also confirmed that they were "not investigating any specific threats made against Qantas executives and employees".

The alleged threats received widespread media coverage in early October, but unions questioned whether they were a "PR stunt" by the airline to win public support.

Qantas contacted police after Mr Joyce received a threatening letter in May, which contained the name and address of the author. The police later deemed that the letter did not constitute a death threat, although the author was spoken to and the "matter finalised".

Police were also notified on October 5 about an email sent to Mr Joyce which contained in its subject line the words "death threats". However, the body copy of the email did not use those words.

Other matters referred to police included complaints that a Qantas employee had received a threatening letter on September 27 and several hang-up phone calls at their home.

The taskforce also attempted to "confirm reports that were allegedly made to company security officers about malicious damage to vehicles parked in a car park".

In early October as the bitter industrial dispute was escalating, Mr Joyce sent a memo to the airline's 35,000-strong workforce informing them that he had referred to police incidents whereby executives had "received menacing correspondence, including to their homes".

The memo stated: "Those who are in the business of using threats, violence and intimidation to obtain their industrial ends should know this: these tactics are cowardly and deplorable. They will not work. Anyone who is caught will face the full consequences."

Mr Joyce later said that Qantas decided to go public at the time because "the bullying and intimidation [of staff] seemed to be going to a new level".

But police say the matter will go no further.

http://www.smh.com.au/national/qantas-deaththreat-probe--dies-20111123-1ntpl.html